TY - JOUR T1 - Convertible Debt with Discount Sacrifices the Upside<br/>for Early-Stage Investors JF - The Journal of Private Equity SP - 25 LP - 27 DO - 10.3905/jpe.2012.15.2.025 VL - 15 IS - 2 AU - Adrian Horotan Y1 - 2012/02/29 UR - https://pm-research.com/content/15/2/25.abstract N2 - Unless the discount rate is much higher than what is considered fair, investing in convertible debt with a discount to the next financing round—without warrants, founders stock, or a conversion price cap—is equivalent to sacrificing most of the upside potential for early stage investors.TOPICS: Private equity, portfolio construction, fixed income and structured finance, portfolio theory ER -